USA: +1-585-535-1023

UK: +44-208-133-5697

AUS: +61-280-07-5697

Products Which Are Offered By The Commercial Banking Industry

Blogs are very important medium in explaining the topic in the easiest way. In this blog we would look at the Products Which Are Offered By The Commercial Banking Industry.

Products & Services

The Commercial Banking industry earns interest revenue from loan products and non interest revenue from service fees.

Retail consumer loans

This category includes individual loans and all mortgage products for retail consumers, including loans secured by real estate and refinancing activity and lease financing and receivables. Individual consumer loans account for an estimated 36.0% of commercial bank revenue, largely unchanged from 2009 since mortgage markets have yet to recover from the 2008 subprime mortgage crisis. This segment represents the greatest opportunity for industry growth during the coming few years as the economy recovers, but competition will be fierce and come from non-traditional players, such as Walmart.

Mortgage product offerings are for home purchasing and refinancing needs and have fixed or variable rates. Commercial banks manage these mortgage portfolios for asset and liability management purposes, or they repackage and sell them to investors (i.e. collateralize d debt obligation and secularization) while retaining the relationship with the customer.

Depository services

This product segment provides a comprehensive range of services and products to consumers and small businesses and accounts for an estimated 34.0% of commercial banking revenue. Banks provide a depository service to consumers by safely holding their money and paying out interest on deposits. Depository products include traditional savings accounts, money market savings accounts, certificates of deposit, individual retirement accounts and regular and interest-accumulating checking accounts.

Commercial, agricultural and industrial loans

Although the commercial client base is much smaller than the individual consumer base, revenue from loans to commercial clients still accounts for an estimated 11.7% of industry revenue at the end of 2012, down slightly from 2009 when companies held off spending as a result of economic uncertainty. This category is broadly termed business lending and includes lending to commercial, agricultural and industrial enterprises.

Other loans

Other products include consumer-related business activities in this industry, including forms of insurance, some card services and the allocation of interest income from loan activities not elsewhere classified. Also included are loans to various federal, state and local government agencies and loans between depository banks.